Criminal Justice News

Saturday, May 26, 2012

Brooklyn Rabbi Pleads Guilty to Money Laundering Conspiracy

TRENTON, NJ—A rabbi based in Brooklyn,
New York has pleaded guilty to conspiring to launder $200,000 to $400,000 in
funds that he believed were the proceeds of unlawful activities, United States
Attorney Paul J. Fishman announced.

Lavel Schwartz, 60, pleaded guilty
Thursday, May 24 before U.S. District Judge Joel A. Pisano in Trenton federal
court to a superseding information charging him with money laundering
conspiracy. Judge Pisano continued Schwartz’s release on bail pending
sentencing, which is scheduled for October 22, 2012.

According to documents filed in this
case and statements made in court:

Schwartz admitted that beginning in May
2008, he and his brother, Rabbi Mordchai Fish, met with Solomon Dwek, an
individual he now knows was a cooperating witness with the United States. For a
fee of approximately 10 percent, Fish and Schwartz agreed to launder and
conceal Dwek’s funds through a series of purported charities, also known as
“gemachs,” which Fish controlled or to which he had access. Schwartz admitted
that prior to laundering Dwek’s funds, Dwek informed him that the funds he
sought to launder were the proceeds of Dwek’s purported illegal businesses,
which included the trafficking in counterfeit goods.

In order to conceal and disguise the
nature and source of Dwek’s funds, Rabbi Fish directed Dwek to make the checks
payable to several gemachs, which were purportedly dedicated to providing
charitable donations to needy individuals. These included Boyoner Gemilas
Chesed, Beth Pinchas, CNE, and Levovous. Once he received the checks from Dwek,
Fish provided them to one of his co-conspirators, who deposited them into bank
accounts held in the names of the purported charities. Fish would then arrange
to make cash available through an underground money transfer network, and other
individuals, including David S. Golhirsh, Naftoly Weber, Avrohom Y. Polack,
Binyamin Spira, Yoely Gertner, and others, would provide Fish and Dwek with the
cash.

Rabbi Schwartz admitted that he would
assist Rabbi Fish and Dwek with counting the cash that had been retrieved from
a coconspirator and admitted to encouraging Dwek to engage in more
transactions, believing that the proceeds stemmed from a counterfeit bag
business and that Rabbi Fish was retaining a 10 percent fee.

Schwartz admitted that, despite knowing
the illicit nature of the funds, he engaged in approximately 10 money
laundering transactions with Dwek. As part of these transactions, Fish helped
convert between $200,000 and $400,000 in checks into a similar amount of cash,
minus the 10 percent fee that Rabbi Fish extracted from the transactions.

Today’s guilty plea stems from a
two-track undercover FBI investigation into public corruption and international
money laundering which resulted in charges against 44 individuals via criminal
complaints on July 23, 2009. At that time, Schwartz was charged in three
separate criminal complaints, all of which likewise charged his brother, Rabbi
Mordchai Fish. Rabbi Fish pled guilty to conspiring to commit money laundering
and is currently scheduled to be sentenced on June 18, 2012. Weber, Polack, and
Spira each pleaded guilty in November 2010 to operating illegal money
transmitting businesses, admitting that they transferred thousands of dollars
in cash to Fish and Dwek. The charges against Gertner and Goldhirsh remain
pending.

The charge to which Schwartz pleaded
guilty is punishable by a maximum term of 10 years in prison and a $250,000
fine. Schwartz also agreed to forfeit approximately $90,000 by the date of
sentencing which represents the 10 percent fee which Rabbi Fish charged Dwek
for conducting the money laundering transactions. Rabbis Fish and Schwartz are
jointly liable for this amount.

In determining an actual sentence, Judge
Pisano will consult the advisory U.S. Sentencing Guidelines, which recommend
sentencing ranges that take into account the severity and characteristics of
the offenses, the defendant’s criminal history, if any, and other factors. The
judge, however, has discretion and is not bound by those guidelines in
determining a sentence. Parole has been abolished in the federal system.
Defendants who are given custodial terms must serve nearly all of that time.

Fishman credited special agents of the
FBI, under the direction of Special Agent in Charge Michael B. Ward, and
Special Agents of IRS-Criminal Investigation, under the direction of Acting
Special Agent in Charge JoAnn S. Zuniga, with the investigation leading to
today’s plea.

The government is represented by Assistant
U.S. Attorney Mark McCarren of the U.S. Attorney’s Office Special Prosecutions
Division in Newark.